Thursday, May 12, 2011

Investor Beware!

If it sounds too good to be true, it probably is. What happens when the wrong words come out of the right mouth? What do you do when you are listening to someone you respect or trust? We don’t want to believe someone like that would steer us wrong and maybe that isn’t there intention. However, before you invest your time or money into something, it makes sense to check it out yourself. Regardless of who the messenger is, do your homework on the message itself.

Where is this coming from? I enjoy a variety of perspectives, so, throughout the day, I listen to several talk radio shows ranging from the ultra-liberal to the conservative. One of the hosts I listen to however is playing a dangerous game with his listeners and their hard-earned cash. He is encouraging them to invest in ‘franchises’ with small donations (at least $500) donated through PayPal. He strongly suggests that listeners file for bankruptcy through a company he is affiliated with. Last week on his show he had someone from a payday lender extolling the virtues of payday loans.

Never is there a dissenting position or an alternate point of view. In fact, anyone who doesn’t agree with this charlatan is chided as being against the poor or being a hater (a word I hate). Listen to him and he will assure you that his motives are pure and altruistic. He has nothing but his listeners’ best interest in heart. Maybe he does; but then again...

I fail to see how paying fees between $10 and $100 at interest rates between 266% - 366% on a small loan ($1,200 and less) helps a person who is struggling (I googled this information in about a minute). Likewise, investing in a ‘franchise’ that has a spotty success record with a group of people you don’t know doesn’t sound financially prudent to me (couldn’t find any information about this franchise opportunity online). If after doing their own fact checking someone decides that bankruptcy is a good idea or that this is the investment opportunity for them, then fine.

However, a decision should never be made based on the personality of the messenger or the content of their overall message. A little research and investigation doesn’t mean you are ‘against’ someone. In fact, people who are legitimate in their offerings will, in many cases, encourage you to investigate them. They know they are on the up-and-up. If someone doesn’t want you to look into their business or background, that, to me, is a bright red flag.

Radio show hosts, family members, slick salesmen, they may all have great ideas or business opportunities but trust yourself and your instincts. Only you know if something is right for you. Have the wherewithal to gather the facts. Have the courage to say no, if that is the best answer for you.

When it comes to your precious time, you can never get that back once it’s gone. While you might be able to get your money back, it usually takes a lot longer and a lot more effort to recoup your losses than it took to earn the money in the first place.

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